The role of the agricultural and agro-processing sectors in reducing unemployment and poverty in the townships of Lesedi

THE ROLE OF THE AGRICULTURAL AND AGRO-

PROCESSING SECTORS IN REDUCING

UNEMPLOYMENT AND POVERTY IN THE

TOWNSHIPS OF LESEDI

TSHWINYANE JAYSON MOFOKENG

BA

(Economics)

Dissertation submitted in fulfilment of the requirements for the degree

of

Magister Commercii (Economics)

in the

School of Economic

Sciences

at the North-West University

Supervisor: Prof

T. J.C. Slabbert

Vanderbijlpark

ACKNOWLEDGEMENTS

First and foremost, I give my thanks to the Lord Jesus for the ability and perseverance He provided for completion of this Masters programme.

I would also like to express my sincere thanks to all those who assisted me in the completion of this dissertation. I would like to thank my supervisor, Professor TJC Slabbert, for his valuable contributions, guidance and expert leadership - without his input this work would not have reached fruition.

I also wish to thank many of my fellow students who supported me when I found the study process to be very difficult.

Special thanks go to African Gospel Church congregation and the preacher, Mr R Mabhina, who supported me with prayers, and my sister, Nomsa Genda, for her wonderful support. "Sisi, I did itJ'. I also wish to acknowledge the support of my family. "Ke ya leboha banabeso".

Finally, my special thanks go to the School of Economic Sciences at the North West University for their financial support.

CHAPTER ONE: INTRODUCTION

1.1 BACKGROUND

The problem of poverty is a typical human phenomenon that has been prevailing for thousands of years. Governments have always been, and continue to be, concerned about this problem (Wilson & Ramphele, 1991:ix). In South Africa, a research study on poverty in the country was commissioned by the government in 1998. This research resulted in the PIR (Poverty and Inequality Report), published on 13 May 1998.

A number of governmental and non-governmental institutions in South Africa, and in most other countries, are concerned about poverty and are constantly monitoring and trying to alleviate poverty. Over the years, poverty has continuously commanded government attention and resulted in the introduction of public welfare policies aimed at reducing poverty (May, 1998). Unemployment is a serious problem in South Africa, affecting some 40 percent of the economically active population who are without employment in the formal economy. This is further compounded by the fact that the formal economy absorbs only about five percent of new entrants annually, and has been losing jobs over the last four years (Ashley et a/. 1994:ll).

The Sedibeng District Municipality is a part of the Vaal Triangle and consists of the Emfuleni, Midvaal and Lesedi Municipalities, comprising a total population of 794,608 in 2001 (Statistics South Africa, 2001). The population of Sedibeng comprises nine percent of the population in the Gauteng Province. The annual growth rate of the Sedibeng population for the years 1996 to 2001 is two percent compared b- t h e growtk ate o f 3.25- percent f o r f h e G w t e n g population. The national average growth rate is also two percent per annum (Statistics South Africa, 2001).

Table 1.1 below offers a profile of the Sedibeng population.

The Lesedi Municipality forms part of the Sedibeng District and has a total population of 71,542. The number of households in Lesedi is estimated at 18,853 and the average household size is estimated at 3.79 persons per household (calculations based on Census figures from Statistics South Africa, 2001).

Table 1.1 Population of Sedibeng (2001)

The agricultural sector is currently a very small sector in the Vaal Triangle. Because of the low capital requirements for job creation, informal small-scale agriculture, rural and urban agriculture may provide opportunities for the low- skilled poor unemployed. Employment in the rural and urban agricultural sector should be encouraged for those who have lost their jobs and those who are unskilled and find it difficult to be absorbed employed by the formal sector. It is likely that the stimulation of the agricultural sector could lead to the establishment of agricultural-based industries like agro-processing industries (Slabbed, 2001 :339). 1.2 PROBLEM STATEMENT Area 1,276 km2 3,312 kmz 1,430 kmz 6,018 kmz

The Sedibeng economy experienced a real GGP growth of -4.1 percent per annum from 1996 to 1999. Between 1991 and 1996 there was a huge decrease in employment opportunities amounting to 54,000. From 1996 to 2001 there was an additional decrease in employment opportunities totalling 4,955 in Sedibeng (calculations based on Statistics South Africa 2001 Census data).

Source: Statistics South Africa, 2001 (Census figures).

Average household size 3.52 3.11 3.79 3.47

As a result, there is a severe poverty problem in the previously disadvantaged townships and in the rural areas. The factors of poverty in these areas may be

Households 187,044 20,778 18,853 226,675 Municipalities Emfuleni Midvaal Lesedi Total Page 2 Population 658,422 64,644 71,542 794,608

summarised as follows (IDP, 2004: 3740):

the low levels of payment for services and poor service provision;

the municipality does not provide any infrastructural services to the farms, nor is it within its capacity to do so in the future;

formal unemployment is very high. Although variations occur throughout the study area, indications are that in some of the areas unemployment is as high as 70 percent;

many people have resorted to the informal sector in an attempt to earn a living; however, incomes earned from these activities are on average very low;

poverty-in-employment is another dominant feature in the poor areas. Indications are that as much as 80 percent of those in formal employment earn less than R800 per month. The working community comprises a mix of farm labourers, domestic workers, unskilled workers and factory workers;

the population in the poor areas is very youthful and not capable of making a significant contribution to households' income. The majority of the relatively younger population is unemployed and dependent, thus contributing to an increase in poverty;

single and unemployed females head a large proportion of households;

formal education and literacy levels are low. Because many households have single or no breadwinners, many scholars are prematurely forced to leave school to seek employment. For instance, in Ratanda township it is recorded that 32 percent of the population have no formal education, while only 0.8 percent have received a post-matric education; and

another problem is that there exists a mismatch between skills required by industry and skills possessed by the jobseekers. This leads to structural unemployment and is difficult to redress.

Against this background, the future possibilities for formal employment in Ratanda and lmpumelelo townships appear to be bleak. The chance for school leavers to

find formal employment seems to be extremely unlikely. It is expected that most of them will end up being poor because the low level of their educational qualifications

lessen their chance of being employed. Due to the lack of work opportunities within the Lesedi area, the community struggles to make ends meet. It is believed that projects such as these listed below could assist community members in generating an income:

small farming (e.g. chickens and vegetable gardens);

skills training to ensure that members of the community are in the position to help themselves through retail trade, baking and cooking, milling and processing (IDP 2004:42); and

access to agricultural co-operatives to serve new and emerging commercial farmers (small and large) from previously disadvantaged groups as well as to assist poor smallholders to produce more efficiently (Van Rooyen et a/.

1 998:s).

Agriculture is generally an important economic activity and life is highly dependent on the performance of this sector. In the light of the poverty and unemployment scenario in Ratanda and lmpumelelo, effective agricultural co- operatives need to incorporate sustainable technologies to help the poor (Mohiuddin & Poonam, 1991:209). Agriculture has several characteristics that make it particularly attractive for increasing employment levels. Strategies within this sector can be used to assist people out of poverty because it is a labour intensive sector and the low-skilled and unskilled can be employed by this sector with relative ease. The agricultural opportunities would permit a significant increase in agricultural productivity and employment creation (Sterling, 1978:7). Agriculture should be considered as an essential part of the food sector. Agricultural production could generate significant income and employment, and could positively contribute towards reducing poverty levels and improving the economic position and food security status of the majority of people in the townships of Ratanda and lmpumelelo (Van Rooyen et a/.

l998:l).

Co-operatives are considered as important instruments for agricultural development. In South Africa, co-operatives are predominantly used in the

agricultural supply and distribution industries, operating through upstream and downstream activities to support commercial farmers. Co-operatives offer the effective promotion of modernisation in South African agriculture, and they are also the important instruments of national agriculture policy in commercial agriculture. Agricultural co-operatives have generally been very successful, while some have existed only through government support. For the townships of Ratanda and lmpumelelo, co-operatives must also be considered as important instruments for agricultural development and, as a result, for reducing unemployment and poverty (Van Rooyen et a/. 1998:236). According to Van Rooyen et a/. (1998:57), co-operative arrangements provide for collective actions in farming. Various models can be considered ranging from the collective ownership and control of resources to collective buying and marketing.

According to Minnie (1 994: l7O), the agricultural sector's great potential to enable the desperately poor to survive, alleviate poverty, create employment, and contribute to economic growth, should not be ignored. However, appropriate policy intervention is needed to enhance its potential. Ratanda and lmpumelelo townships should focus on strategies within the agricultural sector for alleviating poverty (Van Rooyen et a/. 1998:83).

The agricultural sector is an engine for growth and development. This is because of the forward and backward linkages that exist between agriculture, the secondary and tertiary sectors, with agriculture supplying these sectors with raw materials and, in turn, providing a market for the goods and services generated. Therefore, linkages between agriculture and agro-processing sectors can be strong. However, it should be kept in mind that one sector is directly and/or indirectly affected by developments in any other sector (Van Rooyen et a/. 1 998:236).

1.3 AIM OF THE RESEARCH

The aim of this research is to reflect the actual economic position of the inhabitants of the township areas of Lesedi Municipality, namely, Ratanda and Impumelelo. The research will seek to identify the possibilities of agricultural and agro-processing projects in efforts to reduce poverty resulting from unemployment in Ratanda and lmpumelelo. Furthermore, the intention is to

determine what effect these initiatives are likely to have on the local economy in terms of job creation and poverty alleviation.

1.4 OBJECTIVES OF THE RESEARCH

The objectives of this research effort include the following:

1. the identification of informal agricultural employment opportunities in and around township areas, where the majority of the unemployed resides;

2. the initiation of the processing of agricultural products that are consumed on a large scale in the townships areas using labour intensive methods;

3. a search for other labour intensive agro-processing manufacturing possibilities such as entrepreneurial agriculture to enhance employment creation;

4. assessment of the need for the training and acquiring of skills of people in modern production methods and technology which is essential in contributing towards the success of Ratanda and lmpumelelo; and

5. an investigation of the skills possessed by the unemployed and the activities they wish to engage in to sustain themselves.

1.5 HYPOTHESIS

Ratanda and lmpumelelo townships, as part of Lesedi Municipality, have experienced a decrease in employment opportunities resulting in poverty. Both Ratanda and lmpumelelo are in need of agricultural projects that will reduce unemployment and poverty. The initiation of agricultural and agro-processing projects can have a positive impact in reducing unemployment and alleviating poverty. These projects can be deemed successful when they achieve the following:

reduced poverty levels;

reduction of unemployment rates and creation of new jobs; and

establishment of new business (formal and informal).

1.6 METHODOLOGY 1.6.1 Literature study

Both primary and secondary sources will be used, including journals, books, articles, and primary interviews. All sources upon which the research will be based will be clearly specified.

1.6.2 Empirical research

In order to obtain the data required to calculate unemployment and poverty rates for the townships of Ratanda and lmpumelelo, a survey was conducted on a sample basis. The methods for determining the unemployment rate, for measuring of poverty and for the impact assessment are explained below.

I . 6.2. I Methods for the measurement of unemployment

Statistics South Africa uses the definition of unemployment as indicated below as its official definition.

The unemployed are those people within the economically active population who:

a) did not work during the seven days prior to the interview;

b) want to work and are available to start within a week of the interview; and

c) have taken active steps to look for work or to start some form of self- employment in the four weeks prior to the interview.

These general criteria are translated into statistically meaningful criteria, namely:

the population of potential working age (i.e. 15 years and older); and

the economically non-active population (i.e. those who prefer not to or who cannot work).

The unemployment rate (Ur), then, is calculated by the standard equation:

number of' unemployed 100

- Ur

X-- Economically active population (EAP) 1

The criteria for measuring unemployment are straight and definite, i.e. a person is out of work, and is actively looking for a job (Barker, 1999: 171).

Statistics South Africa's definition for employment, which defines the 'employed' as those who performed work for pay, profit or family gain in the seven days prior to the household survey interview, or who were absent from work during these seven days, but had some form of paid work to which they can return (Statistics South Africa, 2000), was simplified. The question was simply asked: 'Do you work for a business, for yourself, or for your family?' Working for a business is regarded as formal employment. Self-employment and family employment is categorised as working in the informal sector.

In the survey only one criterion was taken as an indication of seeking work, namely, if a person 'has the desire to work and to take up employment or self- employment'. The question asked was simply: 'Do you want to work?'

I . 6.2.2 Methods for measuring poverty

The methodology used by Slabbert (1997) to measure poverty at the household level is explained below. Following the guidelines of the World Bank (1990:1), a poor household is defined by Slabbert (1997:47) as a household for which the combined income of all its members is less than the Household Subsistence Level (HSL) as determined for the specific household. According to Potgieter (1980:4), the poverty line shows the income level needed to provide a minimum subsistence level. The most widely used poverty line in South Africa today is the Household Subsistence Level (HSL). The Household Subsistence Level is defined as an estimate of the theoretical income needed by an individual household to maintain a defined minimum level of health and decency in the short term.

If the combined income of a household is described by yi and the poverty line (HSL) of the same household is described by Zi, the extent of poverty, Pi, of this household is described by Pi (yi,zi). The headcount index (H) is defined as the

fraction of the population below the poverty line. The headcount index is adapted by Slabbert (1997:47) to indicate the fraction of households that fall below their individual poverty lines, and is described by means of the equation:

H(y;z)

=

MIN

where: H = the fraction of households below the poverty line;

y = household income;

z = the poverty line of the household;

M

=

the number of households with incomes less than z; and

N = the total number of the households.

The poverty gap (G) measures the average shortfall of the incomes of the poor from the poverty line while the poverty gap index measures the extent of the shortfall of incomes below the poverty line. Slabbert (1997:47) adapted the poverty gap index (R) to be a measure of a specific household, as described by the equation:

where: Ri = the income shortfall of a household expressed as a proportion of the household's poverty line;

yi = the income of a specified household; and

zi = the poverty line of a specific household.

Aecerdinc-to SlitbbeFt +19974Z),-tke-peve~y-gapof a~indwiduaLh~useh&J (in- monetary terms) can therefore be expressed by the equation:

Gi(y;z)

=

zi

-

yj

where: G = the income shortfall of a household;

yi = the income of a specific household; and

Zi = the poverty line of a specific household.

From the three equations above it is clear that increasing household income can only reduce the poverty gap (Slabbert, 1997:47).

I. 6.2.3 Methodology for assessing the impact of agricultural co-operatives in Ratanda and lmpumelelo townships

According to Slabbert (1 997:47), employment creation may supplement the existing income of households to such an extent that the headcount index for the population is decreased significantly. If the number of unemployed persons in a household is described by Ui, and employment opportunities for the

unemployed can be created at an average wage level of W, the poverty gap, Gi, of a single household can be reduced by:

where: u i = t h e number of unemployed members in a household;

W = the average wage earned by unemployed members of households as a result of an employment creation scheme.

Employment creation through agriculture and agro-processing projects aimed at the poor unemployed would have an immediate effect on the extent of poverty because it reduces the poverty gap. However, to have a significant effect, it should also reduce the headcount index. The extent to which the headcount index is reduced will indicate the success of an employment creation programme. The condition for reducing the headcount index is that the poverty gap of a household or households becomes zero or negative. This condition is described by the following equation:

where: Gi =the poverty gap of a single household;

ul

=

the number of unemployed members in a household; and

W = the average wage earned by unemployed members of households as a result of an employment creation scheme.

The larger the number of households satisfying this condition, the smaller the headcount index becomes (Slabbert, 1997:47).

The data identified in the household survey conducted in 2004 will be used for determining the impact of job creation on poverty. The data provides all the information needed to test these models, for example, the age and gender of household members required to determine the individual poverty line (z) for

each individual household; the combined income of each individual household

(y), and the number of unemployed members in a household (u). The household survey also covers information on desired self-sustaining activities and the skills possessed by the poor.

1.6.2.4 Sample survey

Maps of the Lesedi townshiplsquatter areas (Ratanda and lmpumelelo townships) were obtained, and sample stratification was designed on account of the geographical distribution of households and concentration of people in the areas. A sample of 160 households was interviewed by means of a questionnaire designed for obtaining the desired and necessary data for analysis. The area was divided into different parts and the questionnaires were apportioned evenly among the inhabited sites.

Plots or sites at which fieldworkers were to complete questionnaires were individually identified from the map before the fieldwork was undertaken. However, in the instance that individuals could not be secured for an interview, or where it was impossible to trace the house, the next pre-selected household was approached for an interview. Information was obtained from the breadwinner or the spouse.

For the region as a whole, it is important to investigate the difference in wage levels and employment opportunities as well as the technical skills required for

those job opportunities so that the movement of labour can be predicted (Minnie 1994: 172). From the investigations conducted, the research contains the necessary information relevant to Ratanda and lmpumelelo townshipslsquatter areas with regard to:

the number of unemployed members in a household

(u);

the combined income of each individual household (y);

demographic information;

consumption patterns (to determine possible agro-processing projects);

skills possessed by the unemployed, for example, technical skills and entrepreneurial skills; and

preferred fields in which respondents or inhabitants would like to engage in self-sustaining activities.

1.7 OUTLINE OF THE STUDY

Chapter One consists of the background, problem statement, aim of the research, objectives of the research, hypothesis, methodology and an outline of the study.

The second chapter examines unemployment, theoretically, as the main determinant of poverty. It also defines poverty in absolute and relative terms. The calculation of headcount index and the distribution of households below the poverty line, as well as the poverty gap index, are calculated and interpreted.

In the third chapter the poor and the unemployed are portrayed. This chapter also gives a profile of the Ratanda and lmpumelelo population in terms of size, household size, employment, and sectors of employment. It further investigates the skills possessed by the unemployed and the activities they wish to engage in to sustain themselves. Poverty is described in terms of the headcount index. The depth of poverty in Ratanda and lmpumelelo is also discussed.

The aim of the fourth chapter is to recommend particular agricultural and agro- processing projects that can be used to alleviate poverty in the area, and to create

jobs and self-employment. It identifies possible agricultural projects which are aimed at alleviating poverty in Ratanda and lmpumelelo. It also assesses the possible linkages of the agricultural sector to downstream manufacturing.

The final chapter presents a summary of the findings of the study and evaluates the hypothesis against the findings. Conclusions are drawn from these outcomes. The chapter contains recommendations including appropriate approaches and particular projects with regard to the reduction of unemployment and poverty, especially in Ratanda and lmpumelelo townships. Existing agricultural projects and the Integrated Development Plan (IDP) processes also form part of the recommendations in this chapter.

CHAPTER TWO: DEFINITIONS AND THE

MEASUREMENT OF UNEMPLOYMENT AND POVERTY

2.1 INTRODUCTION

This chapter looks at the definition of unemployment and poverty and other related concepts. Various methods of measuring unemployment and poverty are also discussed. The extent of unemployment in Ratanda and lmpumelelo townships is then measured according to these different methods followed by a discussion about how to deal with the unemployment problem. Finally, the theoretical relationship between unemployment, poverty, and agriculture is also discussed.

2.2 DEFINITIONS AND THE MEASUREMENT OF UNEMPLOYMENT

According to Amis (1 995: I5O), labour is the predominant resource base available to the poor. This means that unemployment is one of the main determinants of poverty. In addition, employment, or a lack of it, is the single most important determinant of urban poverty. Assuming that unemployment has a direct relationship to poverty, and that it is an indicator of poverty especially in an urban context, the employment status of residents of Ratanda and lmpumelelo townships is analysed in the following sections.

Statistics South Africa conducts an annual sample survey to provide certain insights into, and perspectives on, the most important elements of unemployment. These surveys, called October Household Surveys (OHS), possibly give the most accurate portrayal of unemployment in the country, although their data are subject to criticism (Barker, 1999: 171).

Statistics South Africa uses the following definition of unemployment as its official definition:

The unemployed are those people within the economically active population who:

a) did not work during the seven days prior to the interview;

b) want to work and are available to start within a week of the interview; and

c) have taken active steps to look for work or to start some form of self- employment in the four weeks prior to the interview.

These general criteria are translated into statistically meaningful criteria, namely (Barker, 1 999: 17 1 ):

the population of potential working age (i.e. 15 years and older);

the economically non-active (i.e. those who prefer not to or who cannot work); and

the economically active population (i.e. all those who are fit to work, wish to work, have no employment and are ready for and actively looking for work, plus the employed and self-employed).

The unemployment rate is the number of unemployed persons taken as a percentage of the total economically active population (EAP), which includes both the employed and the unemployed.

The unemployment rate (Ur) then, is calculated by the standard equation:

number of unemployed 100

x - - - Ur Economicully active population (EAP) 1

2.2.1 Measurement of unemployment

Although there are various ways of measuring unemployment, there are four broad approaches proposed by Barker (1999:165-172) that can be used, which are presented as follows.

1) Census method

With this method the economic status of the whole population is determined by asking individuals for information about their economic status.

2) Difference method

The difference between the economically active population and those in employment is taken to be the number of unemployed individuals.

3) Registration method

This method provides for the unemployed to register at placement offices - in South Africa the responsibility for this resides with the Department of Labour.

4) Sample survey method

A survey is undertaken, like in the case of Ratanda and lmpumelelo townships, on a sample basis to obtain the data required to calculated unemployment rates for specific groups of people (Barker 1999: 165-1 72).

2.2.2 Shortcomings of the definition of unemployment

According to Barker (1999:173), the shortcoming of the definition of unemployment is that it fails to reflect persons who are under-employed, i.e. when a person's employment entails less than the number of normal hours of work or than other jobs. There are two types of underemployment:

1) visible underemployment occurs when persons involuntarily work less than the number of normal hours and are seeking, or have the desire for, full time or additional work; and

2) invisible unemployment occurs when there is a misallocation of labour resources, for example, the underutilisation of skills or very low productivity (Barker, 1 999: 1 73).

Another problem that affects the accuracy of the unemployment rate is the multiplying effect. This is the effect of high levels of unemployment on involuntary unemployment. For instance, if a mother and a grown-up daughter from the same family are unemployed, both will express a desire to become employed. However, if one of them is successful in obtaining employment, the other will no longer be available for employment. It is not possible to correct or adjust the results for the impact of this multiplying effect (Slabbert, 2001 :43).

Another obvious example is the exclusion of discouraged workers from the number of the unemployed. Discouraged workers are persons who desire to work, but have made no effort in the last four weeks to find work, either because of a perceived lack of jobs or a perceived inability to find a job due to personal factors such as age, race, or lack of skills. Since discouraged workers have made no overt job search efforts, they are counted as outside of the labour force and are thus accounted for in the unemployment rate (Kaufman,

l994:649).

2.2.3 Types of unemployment

In order to address the problem of unemployment successfully, a distinction should be drawn between different types of unemployment. This gives an indication of the possible reasons for unemployment in the townships of Ratanda and lmpumelelo, and also some ideas on how the problem should be addressed. Economists usually distinguish between four different types of unemployment, namely, frictional unemployment, structural unemployment, cyclical unemployment, and seasonal unemployment.

2.2.3.

I Frictional unemployment

Frictional unemployment arises as a result of the constant flow of people between jobs, and into and out of the labour force. This is caused by imperfect information in the job market and the fact that it takes time for unemployed workers and employers with job vacancies to find each other. If information was perfect and mobility was costless, this process could be done instantaneously, and unemployment of this nature would not occur (Kaufman, 1994:652).

Frictional unemployment has several distinctive characteristics. Firstly, it affects a relatively large number of people across all demographic groups, industries, and areas of the country. A second important feature of frictional unemployment is that a certain amount of frictional unemployment is unavoidable. Because of the large flow of people into and out of the labour market it is impossible to reach a zero unemployment rate. Public policy could reduce the level of frictional unemployment by eliminating undesirable causes of turnover (Kaufman, l994:652).

2.2.3.2

Structural unemployment

The second type of unemployment is structural unemployment. It arises from a basic mismatch between the types of jobs that are available and the types of people who are seeking jobs. This mismatch may be related to skill, education, experience, geographic area, or age. Hence the empirical survey undertaken in this study will highlight the demographic profile of the Ratanda and lmpumelelo population. With structural unemployment, job vacancies and unemployed workers coexist in the market and, even in the long run, are not easily matched. By merely gathering the data about the age, educational qualification, and skills of the unemployed in the study area, the reasons for their unemployment will be reflected (Kaufman, 1994:70).

One solution to reduce this kind of unemployment could be the government's provision or subsidisation of training programmes. This could possibly be achieved by giving 'hard-to-employ' young people marketable skills and offering tax incentives to companies that offer training to workers from targeted groups. A second approach could be to make the government the employer of last resort by offering public service jobs to workers who suffer from persistent unemployment (Kaufman, 1994:70).

2.2.3.3

Cyclical unemployment

The third type of unemployment is cyclical unemployment (sometimes called demand deficient unemployment). The basic cause of this type of unemployment is insufficient aggregate demand in the economy to generate enough jobs for those who seek them. Cyclical unemployment occurs because there are not enough jobs to go around. This type of unemployment is closely linked to the movement of the economy up and down the business cycle. On the upswing of the cycle, the unemployment rate gradually declines as growth in spending and production in the economy induce the firms to increase employment, both by calling back laid-off workers and hiring new employees. With the onset of a recession, the pattern reverses itself - the decline in sales prompts firms to lay off a number of existing employees and cut back on new hires, leading to a shortfall of available jobs in the economy and a rise in unemployment. The most direct approach in addressing cyclical unemployment is to adopt fiscal and monetary policies that ensure stable and healthy rates of

economic growth. An alternative approach might be public works projects such as urban renewal at the onset of periods of recession (Kaufman, 1994:654).

2.2.3.4 Seasonal unemployment

The fourth type of unemployment is seasonal unemployment. It is due to normal and expected changes in economic activity during the course of a single year. It is found in many sectors, with agriculture probably being the best example. Persons working during peak periods and being unemployed in off-peak periods are described as seasonal workers or the seasonally unemployed. This type of unemployment occurs on a regular and predictable basis. In order to find out whether Ratanda and lmpumelelo residents are seasonally unemployed or not, certain questions will be asked about the respondents' duration of unemployment (Barker, 1 999: 166).

2.3 EMPLOYMENT IN SOUTH AFRICA

Employment data are important for a number of reasons. Increases in the labour force can, for instance, be compared with increases in employment to determine the reasons for unemployment.

Sectoral employment:

In Table 2.1 an analysis is provided of employment per economic sector in

South Africa, for the period from 1950 to 1996.

Table 2.1 Employment per economic sector in South Africa. Agriculture Mining Manufacturing Electricity Construction Trade

Transport and communication Finance and insurance Non-government services Government

Domestic service TOTAL

% share of total employment

Source: Barker, l999:87

It is apparent that there has been a sharp decline in the percentage of employment in the primary sectors, i.e. agriculture and mining. Agriculture's share, in particular, has declined substantially. Whereas this sector was responsible for nearly 27 percent of employment opportunities in 1950, this had declined to 11 percent in 1996. The rate of employment in the secondary sector (manufacturing, electricity, gas and water, construction) showed an increase of 16.6 percent in 1950 to 25.1 percent in 1996. The sharpest increase, however, was in the tertiary or services sector (excluding domestic services), where the

rate of employment in the tertiary sector has more than doubled over the past four decades (Barker, 1999:86).

The agricultural sector's contribution to employment creation and its ability to create employment within the farming sector decreased rapidly. Despite a decreasing trend in the number of people employed in this sector, it remains the most important labour-intensive sector in the economy. Agriculture is also the backbone of the rural economy (Van Schalkwyk & Meyer, 1994:;).

2.4 AN EMPLOYMENT STRATEGY FOR RATANDA AND IMPUMELELO

According to Finnemore (1996:42), internal economic factors, such as high unemployment, high population growth, and an unequal distribution of wealth, are urgent issues demanding government attention. In response to all these needs and pressures, government policy can play a major role in influencing economic growth, unemployment levels, poverty, and productivity.

There are two key components that Ratanda and lmpumelelo townships can strategically apply. The first is to increase the demand for labour by raising both output and labour absorption capacity through:

strengthening special employment programmes;

fast-tracking movement into new labour absorbing production methods, and sectors producing goods for domestic markets; and

promoting small, micro, and medium-sized enterprises (SMMEs).

The second component is to strengthen the employability of labour by:

improving the availability of skills, for instance, through improved education and training, and

improving social security services and the implementation of a social plan (Finnemore, 1996:42).

2.5 REASONS WHY JOB CREATION SHOULD BECOME THE HIGHEST PRIORITY IN RATANDA AND IMPUMELELO TOWNSHIPS

Unemployment has grave consequences for every country. Not only does it affect an individual's dignity and self-respect and erode his or her standard of living, but it also affects society as a whole because of high crime rates and frustration leading to unrest and lawlessness. Employment in the broader sense of the word is the main link between economic growth and higher living standards (NEDLAC, l998:43).

Unemployment confines people to poverty, as in Ratanda and lmpumelelo township areas. In a NEDLAC report (1998:19) the point is made that poverty

and employment status are closely linked, with half of all poor people of working age outside the labour market altogether. Barker (1999:164) adds that high unemployment levels are having serious effects on perceptions of the success or failure of the market economy. There is a fairly widespread perception among disadvantaged communities that the market is unable to address the problem, and is even possibly responsible for unemployment.

The other reason for the attention given to unemployment is that it imposes substantial costs on individual workers and their families. The first is the loss in income that goes with unemployment. The second potential cost is that unemployment also imposes significant psychological and emotional costs on workers and their families, as revealed by the positive association between increased unemployment and higher frequencies of mental illness, suicide, and divorce. Finally, society must bear substantial economic costs because of heightened crime, drug addiction, and other maladies (Kaufman, l994:647). These are only some of the reasons why employment creation should become the highest policy priority in Ratanda and lmpumelelo townships.

2.6 DEFINITIONS AND MEASUREMENT OF POVERTY

The whole exercise of deriving a definition of poverty is an attempt to find a way of identifying the poor population in Ratanda and lmpumelelo townships. Who are the poor? What common characteristics can be used as general criteria for the identification of the poor? This section will survey literature on the definition and measurement of poverty and other related concepts. Literature on poverty invariably divides the foundations of the definitions of poverty into two approaches, namely, the absolute and the relative approach.

2.6.1 The absolute approach

The absolute approach to poverty looks at poverty from the viewpoint of deprivation or the lack of sufficient income to satisfy basic needs. Unsatisfied needs, especially of a physiological nature, are seen as absolute poverty. Holman (1978:2) refers to such poverty as subsistence poverty or poverty below the subsistence level. He refers to the poor as those who have regular, though minimal income. The very poor are people whose income, for whatever reason, falls far below the subsistence level. The operative word in this approach is

'income'. Income that consistently falls short of providing the basic necessities of life is viewed as causing poverty. Determining the monthly average income per household of Ratanda and lmpumelelo townships will find the cause of poverty in this respect.

The World Bank (1 98O:v) refers to absolute poverty as the condition of life so characterised by malnutrition, illiteracy and diseases as to be beneath any reasonable definition of human decency. In this definition, income is not necessarily given as the cause of such poverty. In fact, the definition is open- ended regarding the cause. In their view, absolute poverty means more than having a low income (World Bank, 1980:l).

The absolute approach in studying the poverty of subsistence in the region can be followed. By following this approach, people living in severe poverty can be identified. The extent of absolute poverty is then defined as the number of people living below a specified minimum level of income (Todaro, 1994: 145).

2.6.2 The relative approach

The 'absolute approach' definitions of poverty have been widely criticised as insufficient and lacking in clarity. They are based on the notion of subsistence. What comprises subsistence is questionable because it depends on the place and society that is evaluated (Alcock, 1993:60). Such problems led to the development of the relative concept of poverty.

The relative approach to poverty is based on the idea that people are poor in relation to the community or society in which they live. This means that their income is consistently below the level that would allow them to attain a specific average standard of living. This is judged against the standard of living of the society to which they belong (Wratten, 1995: 12).

Alcock (1993:59) sees the relative approach as more subjective (normative) than the absolute approach. He further explains that the relative definition of poverty is based upon a comparison between the standard of living of the poor and the standard of living of other members of society who are not poor. This usually involves some measure of the average living standard of the whole society in which the level of poverty is being studied. Relative definitions of

poverty imply inequality in wealth and income distribution that leads to a lopsided social stratification and classes. This, in turn, leads to suggestions of redistribution of wealth as one of the policies to combat poverty.

Relative definitions also imply other issues, as pointed out by Holman (1 978:14- 20). According to him, such an approach includes four main elements, listed below:

1. comparisons with other persons - the lowest incomes are too far removed from those of the rest of the community;

2. the contemporary environment

-

this takes the dynamic nature of society into account and the prevailing standard of living is used as a measure;

3. inequality;

4. the value judgement that refers to the standard that society sees as 'acceptable' or the prototype standard that people pursue. People habitually judge themselves against a 'reference group'. The poor do the same, having a standard they would like to attain, failing which, they see themselves as poor. Researchers are also prone to give moral judgement to the concept of poverty and in the interpretation of statistics.

The preceding discussion shows that a clear-cut definition of poverty is not simple to construct. For the purpose of this study, poverty is defined as the inability to attain a minimal material standard of living. The World Bank defines poverty as the inability of people to attain a minimum standard of living. This definition gives rise to three questions: 1) how do we measure the standard of living?; 2) what is meant by a minimum standard of living?; and 3) how can we express the overall extent of poverty in a single measure?

The most obvious measure of living standards is an individual's or household's real income or expenditure (with an allowance made for output produced for own consumption). However, as this measure does not capture dimensions of wealth such as health, life expectancy, literacy and access to public goods, consumption-based poverty measures of living standards based on income,

therefore, may need to be supplemented by other measures that include non- income measures (Thirlwall, 1994: 1 1).

In theory, a consumption-based poverty line can be thought of as comprising two elements. Firstly, an objective measure of expenditure is necessary to determine a minimum level of nutrition, and secondly, there is a subjective additional amount reflecting the cost of individuals participating in everyday life. What is regarded as an acceptable standard of living in the United Kingdom will be different from what is regarded as acceptable in South Africa. In practice, however, for the measurement of poverty the World Bank uses just two figures for per capita income: one to classify the total poor, the other to measure the extremely poor. A poverty line shows the income level needed to provide a minimum subsistence level. Once the poverty line has been calculated, the simplest way to measure poverty is by using the headcount index that simply adds up the number of people who fall below the poverty line (sometimes expressed as a proportion of the population) (Thirlwall, 1994:ll).

1) Definition of household income

Most of the quantitative measurements of poverty are based on income levels as listed below (Slabbert, 2001 :46):

1. salaries, wages, overtime and commissions prior to the deductions of pensions and taxes;

2. net profit from business, farming or professional practice;

3. estimates cash value of fringe benefits such as a company car and housing subsidy, food, clothing and accommodation provided by employers; and

6 -any ather- regular income (pensions, interest, d i v i d e n d , rent from boardersllodgers, help from the family) (Slabbert, 200 1 :46).

2) Definition of a poverty line

The poverty line shows the income level needed to provide a minimum subsistence level. According to Slabbert (1997:44), the most widely used poverty line in South Africa today is the Household Subsistence Level (HSL).

Potgieter (1 980:4) defines the Household Subsistence Level as an estimate of the theoretical income needed by an individual household to maintain a defined minimum level of health and decency in the short term.

The HSL is calculated as the lowest retail cost of a basket of necessities of adequate quality. This comprises the total food, clothing, fuel, lighting, washing and cleansing materials required for each person, together with fuel, lighting and cleansing materials needed by the household as a whole, and the cost of rent and transport. A comparable calculation can thus be made for any household of any given size and composition.

3) The headcount index and the poverty gap

Slabbert (1 997:47) formulated the headcount index and poverty gap as follows: the headcount index is defined as the fraction of the population below the poverty line. The purpose of the headcount index is to quantify the number of those individuals or households that fall below the poverty line. If the distribution of incomes is represented by y and the poverty line by z, a poverty measure may be expressed by the function P

=

(y;~).

Suppose that in a population of N households with incomes yi

(I

= 1

...

N) ranked in ascending order by subscript, M units have incomes equal to or less than the poverty line z, then the headcount ratio (H) may be defined as follows (Borooah

8

McGregor, 1991 :359):

Headcount index:

H (y;z)

=

MIN

- - -- --- - -

The headcount index -is coKSrned -With -the -number- o f p w p e e p l e ix

households whose incomes fall below a given poverty line as a ratio of the whole population.

Example: if there are 500 households in the survey and 250 of them have income below the poverty line z, then H(y;z)

=

250/500 = 0.5. The poverty rate is then 50 percent, meaning that 50 percent of the households are below the poverty line.

However, one weakness of the headcount index is that it ignores the extent to which the poor fall below the poverty line. According to Slabbert (1997:48), in order to overcome this weakness the concept of the poverty gap may be used. The poverty gap measures the transfer of income required to bring the income of every poor person up to the poverty line (Thirlwall, 1994: 12). The poverty gap index is concerned with the depth of poverty (its magnitude) and therefore measures the extent of the shortfall of incomes below the poverty line (Slabbed, 2000:49). Slabbert (1997:48) defines the poverty gap ratio (R) by the following equation (adapted from Borooah and McGregor, 1991 :359):

where: R = the average income shortfall of the poor expressed as a proportion of the poverty line;

z = the poverty line;

y

=

the income of a household; and

M = the number of households with incomes below or equal to the poverty line (z).

Example: The poverty line (z) is determined at R800,

The household's income ( y , ) is R500,

The poverty gap is then (z-yi)

=

R300,

The individual poverty gap ratio of the household is then:

The average of all the poverty gap ratios of the sample of households will give R.

2.7 GROUPS AT RISK OF POVERTY

Kaufman (1994:700) points out that the problem of poverty weighs disproportionately on certain groups in the population, although no group is immune from poverty. Among those groups most at risk are the following:

female-headed households

-

families headed by women (with no husbands present) have a one-third chance of being poor. The burden of poverty is spread unevenly. Women in general are disadvantaged and in poor households they often shoulder more of the workload than men, are less educated, and have less access to remunerative activities;

age

-

children under the age of 15 years have the highest incidence of poverty of any age group. One reason for this is that children increase a family's needs, but contribute little, if any, income;

education - the poverty rate declines rapidly with additional years of schooling. Among families headed by high school dropouts, the poverty rate is higher than those families with a household head who had even one year of tertiary education; and

work experience - persons in families with a household head who worked

1

at a year-round job (50-52 weeks) were much more likely to have incomes above the poverty line. Not unexpectedly, people who work only part-time or not at all have a significantly greater chance of being in poverty.

2.8 POVERTY IN RATANDA AND IMPUMELELO TOWNSHIPS 2.8.1 Urban Poverty

- - - -

-- - - -- -

-- -- -- -- -- - -- - - --- - -

Urban poverty in Lesedi Municipality is primarily located in and around the Ratanda and lmpumelelo areas. High levels of unemployment, as well as poverty-in-employment (wages below the breadline) characterise communities in these areas. Although important strides have been made in terms of the provision of basic services and facilities to these communities, large sections 01 them still have inadequate access to these services (IDP, 2004:60).

2.8.2 Rural Poverty

The most marginalised group in Ratanda and lmpumelelo is the landless rural population (farm workers and tenants). In addition to very high levels of unemployment and poverty-in-employment, these communities generally do not have adequate access to even the most basic services and facilities. Further, they are threatened by job losses and evictions as commercial farming becomes more and more mechanised and less dependent on unskilled labour. Generally speaking, the landless rural population is the least skilled of all the population groupings in Ratanda and lmpumelelo, although most community members do possess basic agricultural skills (IDP, 2004:60).

2.8.3 The determinants of poverty

The main causes of the poverty problem in the townships of Ratanda and lmpumelelo which need to be considered in formulating a local poverty alleviation strategy include the following:

the low current economic growth rate coupled with an ever-decreasing reliance by formal employers on unskilled and semi-skilled labour;

the prevailing low levels of education and skills within the poor communities, restricting not only their access to formal jobs, but also their ability to enter the economy by means of their own initiative;

the restricted financial and institutional capacity of government to effectively combat poverty and create jobs;

-- - - -- - - -- - - - -- - - -- - - -- - - - -- - - -- - - - -

-the higher-than-average birth rates in poor communities and influx of homeless people, which exacerbate the poverty problem and effectively pass it on to future generations (IDP, 2004:38);

limited labour market opportunities. The explanation for the existence of poverty is that certain segments of the population have limited job opportunities in the labour market. The local economy does not generally provide sufficient jobs for everyone who desires to work, and the types of jobs available at the bottom end of the labour market offer low wages, little employment security, and few training opportunities (Kaufman, 1994:702).

undesirable life events. The reason why some people are poverty stricken is that they suffer due to unforeseen life events that substantially reduce either the economic resources available to them or their income earning ability.

Examples of such life events include divorce, death of a spouse or parent, prolonged illness, loss of a job, or the infirmities that accompany old age. Various undesirable life events such as unwanted pregnancy and disability have been found to be an important cause of poverty (Kaufman, 1994:707); and

an increase in the population of a region that does not have a commensurate increase in employment and employment opportunities leads to an increase in poverty (Mokoena, 1994:42).

2.9 THE ROLE OF AGRICULTURE AND AGRO-PROCESSING TO REDUCE UNEMPLOYMENT AND POVERTY

This section analyses the important role that the agriculture and agro- processing sectors can play in the structural transformation of the developing economy of Ratanda and lmpumelelo. The location of Lesedi within a high potential agricultural area highlights the importance of this sector for the economy. The importance of this sector should be emphasised and it should be encouraged through the following actions and programmes:

existing large-scale agricultural enterprises should be encouraged to add value to their products, thereby increasing the impact on the local economy;

small farm programmes should be investigated and promoted, and funding for land reform projects should be made available by the Department of Land Affairs; and

infrastructural investment should be financed in order to promote development, especially in the disadvantaged areas of Ratanda and lmpumelelo townships (IDP, 2004:82,83).

Due to the fact that the Ratanda and lmpumelelo areas are mainly rural in nature, with high potential agricultural land and a strong farming community, the focus in many projects should be on agriculture. Every effort should be made to

provide opportunities for people to enter the market. This can be achieved through access to the formal economy, land and training (IDP, 2004:84).

All economic strategies and projects, directly or indirectly, should work towards poverty alleviation. Provision of opportunities for skills training and public works programmes should be undertaken in order to reduce the high levels of poverty in the area of study since they are the catalysts for poverty alleviation (IDP, 2004:85).

2.9.1 Food supply

One of the primary roles of agriculture and the agro-processing industry is to ensure a secure food supply to consumers at reasonable prices. As a lower income group, the rural and urban populations in the area are inclined to spend a high percentage of their earnings on food. It is therefore crucial that Ratanda and lmpumelelo townships maintain a competitive agricultural sector that is able to meet the demand for basic foodstuffs (Van Schalkwyk & Meyer, 19945).

2.9.2 Provision of employment

South Africa's agricultural sector contributes substantially to economic development and welfare. The agricultural sector generated 4.4 percent of gross domestic product (GDP) in 1995 and 14 percent of the economically active employed is found in agriculture. The sector's real contribution, however, is far more crucial as regards its role in poverty abatement (Van Rooyen et a/. l998:l).

The agricultural and agro-processing sectors can achieve the following:

reduction of poverty levels;

creation of new jobs;

establishment of new business (formal and informal);

broadening the tax base of the local authority;

support for SMMEs;

attract increased government fundinglinvestment;

increase general buying power;

growth in infrastructural investment by local authority;

diversification of the economy; and

0 . skills training facilities (IDP, 2OO4:7l).

2.10 CONCLUSION

This chapter has shown that:

the definition of unemployment can vary from researcher to researcher. However, the October Household Surveys (OHS) possibly gives the most accurate picture of unemployment;

a distinction drawn between different types of unemployment gives an indication of the possible reasons for unemployment in the townships of Ratanda and lmpumelelo, and also some ideas on how these problems can be addressed;

poverty and employment status are closely linked, with half of all poor people of working age outside the labour market altogether. Unemployment has grave consequences for every country. It not only affects an individual's dignity and self-respect and erodes his or her standard of living, but also affects society as a whole, because of high crime rates and frustration leading to unrest and lawlessness. Unemployment confines people to

as - - in the case of the townships - - -

-of Ratanda and

- - -

-Impumelelo;

- - -

-the measurement of poverty also depends on -the definition applied. There are a number of measurements of poverty in existence. Most of these measurements depend on income and inequality in income. It is always better to use a number of methods in building up a poverty profile of a region. Policies and measures used to combat poverty will depend on both the definition and the measurement applied in assessing poverty;

the poverty problem in the townships of Ratanda and lmpumelelo is caused by,

among other factors, the low current economic growth rate coupled with an ever-decreasing reliance by formal employers on unskilled and semi-skilled labour. The prevailing low levels of education and skills within the poor communities restrict not only their access to formal jobs, but also their ability to enter the economy by means of their own initiative. The higher-than-average birth rates in poor communities and the influx of homeless people exacerbate the poverty problem; and

due to the fact that the Ratanda and lmpumelelo areas are mainly rural, with high potential agricultural land and a strong farming community, the focus in a

number of projects should be on agriculture. The most essential role of agriculture and agro-processing is ensuring the creation of new jobs for the unemployed and a secure food supply to consumers at reasonable prices.

CHAPTER THREE: PROFILE OF THE POPULATION OF

RATANDA AND IMPUMELELO

3.1 INTRODUCTION

This chapter provides an analysis of the Lesedi population in general and, more specifically, for Ratanda and lmpumelelo. Ratanda and lmpumelelo are located in the Lesedi municipal area. Lesedi Local Municipality is located on the south- eastern edge of Gauteng, and together with the local municipalities of Midvaal and Emfuleni falls under the jurisdiction of the Sedibeng District Council. Lesedi spans an area of &1430km2, which is largely rural, with two towns situated within it, namely HeidelbergIRatanda in the western part, and Devonllmpumelelo on its eastern edge. This area can be described as mostly agricultural, with Heidelberg and Devon being the primary service centres for the surrounding agricultural areas.

As far as its regional context is concerned, Lesedi is situated relatively far away from the hub of economic activity in Gauteng, but is traversed by two national roads, namely the N17 and the N3, which create certain potential in terms of future economic development. Lesedi's contribution to the region lies primarily within the agricultural sphere; however, areas like Heidelberg; Jameson ParklKaydale and VischkuilIEndicott also fulfil a residential function for many people working in the East RandlFar East Rand.

A sample of 160 households was selected for the purposes of interviews by means of a questionnaire and approached in June 2004 to determine the economic status of the population of Ratanda and lmpumelelo in terms of:

- - - -

-a unemployment;

poverty levels; and

household income.

In the analysis some products were also identified that could possibly be used to initiate agro-processing projects in Ratanda and lmpumelelo townships. The skills possessed by the unemployed and the activities they wish to engage to

sustain themselves are also highlighted. The following data were obtained for this analysis:

consumption patterns (to determine possible agro-processing projects);

skills of the unemployed;

willingness to undergo skills training and preferred fields;

willingness and ability to undergo training at tertiary level; and

preferred fields in which respondents would like to start self-sustaining activities.

The unemployment and poverty data were used to construct a model for the purposes of an Economic Impact Assessment. This model measures the impact of projects on the Ratanda and lmpumelelo communities in terms of income generation and poverty alleviation.

The opinions of the residents on the following environmental issues are also reflected :

the cleanliness of the environment and responsibility to clean it;

smoke and noise pollution and responsibility to reduce levels of the pollution;

the value attached by residents to different kinds of pollution; and

how households are affected by crime.

1

3.2 DEMOGRAPHIC PROFILE OF RATANDA AND IMPUMELELO

I

Table 3.1 below gives a profile of Lesedi's current population.

I

Table 3.1 Current population of Lesedi

I

The demographics of the Ratanda and lmpumelelo communities are portrayed below in terms of the age categories of the population, gender distribution, qualifications of the post-school population, and the average length of stay in Ratanda and lmpumelelo. Lesedi's population growth is lower than in the urban areas of Gauteng. The 2001 population figures available from Statistics South Africa for Lesedi were used to estimate the 2004 population figures. The population of Lesedi is estimated at 71,542 for 2001. The age structure of the population is relatively young, which holds serious implications in terms of the number of people that will enter the job market within the next decade.

The age categories of the total population of Ratanda and lmpumelelo are portrayed in Figure 3.1, and the male and female distribution of the population

Figure 3.1

Total population of Ratanda and Impumelelo: % in age

categories

Total)j:)oplilation: percenta~e in a~e cate~ories

80- 84

-...

_-

_.

I.

I

.

Female Male 60- 64 40-44 0-4 20 - 24 15 10 5 o 5 10

--Source: Survey data, 2004.

There seems to be a relatively high percentage of the population between 20 and 40 years of age, which is the age at which people in general are the most productive. The Ratanda and Impumelelo communities have more females (54.51 percent) than males (45.49 percent). According to Mokoena (2004:101), 33.3 percent of the Evaton West female population is between 20 and 40 years of age, while 36.6 percent is 19 years of age or younger. The comparative figures for males are 34.1 percent and 50 percent respectively. This means that half of the male population in Evaton West is younger than 20 years of age, and 84 percent is younger than 40 years of age. The male population is therefore relatively young (certainly in comparison to the female population). The Bophelong community also has more females than males. A total of 46.5 percent of the population is male and 53.5 percent is female (Slabbert, 2003:5).

Page37

----Figure

3.2 Male and female

distribution

of the population Gender

60

r .~

50

CI) en

40-C'D

-i

30

(J I..

~

20-10

o Male

Female

Source: Survey data,2004.

Figure 3.3 Qualifications of population out of school

Qualifications Population Out of School 20.2

0.3 0.0

Source: Survey data, 2004.

The qualifications of the population are portrayed in Figure 3.3. A total of 30 percent of the post-school population has a Grade 12 or higher qualification. Ratanda and Impumelelo have a large young population, many of whom are out of school and not productively employed. Educational and skills levels are generally low - this is a constraining factor in terms of sustainable economic development in the study area.

Siabbert (1997:101) gives a profile of the qualifications of the black population in .the VTMA not at school any longer. It was found that of the poor post-school

Page 38 24,0 20..0 Q) 16.0 -I: 12.0 Q) t) ... 8.0 Q) Il. 4.0 0.0